SAC Capital Advisors has agreed to plead guilty to insider trading violations and pay a record $1.2 billion penalty, becoming the first large Wall Street firm in a generation to confess to criminal conduct. The move caps a decade-long investigation that turned a once mighty hedge fund into a symbol of financial wrongdoing. The guilty plea and fine paid by SAC, which is owned by the billionaire investor Steven A. Cohen, are part of a broader plea deal that federal prosecutors in Manhattan announced on Monday. It also will impose a five-year probation on the fund and require SAC to terminate its business of managing money for outside investors, though the firm will probably continue to manage Mr. Cohen’s fortune. More in the New York Times [...]

The government’s legal pursuit of JPMorgan Chase & Co. has struck some on Wall Street as unfair. CEO Jamie Dimon recently reached a tentative deal with the Justice Department to put an end to some of the embattled financial firm’s legal troubles, a settlement worth $13 billion in fines and consumer relief; it’s the biggest settlement ever announced involving a single company. In fact, this was a just outcome, and it should be a new model for holding financial institutions accountable in probes related to bad mortgages and the 2008 financial crisis. JPMorgan Chase is accused of selling mortgage securities that it knew were faulty, although it inherited many of the alleged abuses in its 2008 acquisitions of Washington Mutual and Bear Stearns. JPMorgan Chase’s supporters argue that it only purchased the two banks under duress, when pressed by government officials to do so in an effort to prop up the banking system in the early days of the credit crisis. That’s not entirely true, however. JPMorgan Chase had sought to purchase Washington Mutual several months before the crisis struck. Plus, even after paying the government settlement, JPMorgan Chase will come out way ahead on the deal. Washington Mutual had a $40 billion market capitalization when JPMorgan Chase purchased it for $1.9 billion, and its mortgage business’s performance has outpaced expectations ever since. No one will pity Dimon and his shareholders the $750 million Washington Mutual earned the bank last quarter. More in the Boston Globe [...]

A startling report in today’s Washington Post, the newspaper says more than a thousand of the nation’s non-profits have each acknowledged losses of a quarter million dollars or more, because of theft, investment fraud, embezzlement or other unauthorized use of funds. The report is based on tax filings by the non-profits during the past five years. Each non-profit disclosed the problem by checking a box on the tax form indicating what’s called a significant diversion of funds. For more about all this, we’re joined from Washington by Joe Stevens, he’s an investigative reporter for the Post and the co-author of today’s piece. So your article says just the ten largest losses you’ve identified add up to more than five hundred million dollars, give us some examples. More on PBS NewsHour [...]

Which of these statements is true: Jamie Dimon’s company has agreed to pay the largest regulatory settlement ever by a single firm. Jamie Dimon is the best bank chief executive in the world. Jamie Dimon can walk on water. If your answer was all three, then you can join the ranks of Wall Street analysts and financial pundits who claim that Dimon is the best possible chief executive of the best bank in the country even after it has paid tens of billions of dollars in fines and legal expenses on investigations into more than a dozen of its businesses. More in USA Today [...]

Plotting a pump-and-dump stock scheme? Waiting to trade on that hush-hush tip you got from a friend? Looking to corner the market on pork bellies? Now might be your chance for any and all of those shenanigans. The thousands of people who keep U.S. financial markets running smoothly and fraud-free could be on unpaid leave starting tomorrow, along with the National Park rangers that corral unruly grizzly bears and the scientists tracking deadly pathogens at the Centers for Disease Control and Prevention. A few days ago, Bart Chilton, head of the U.S. Commodity Future Trading Commission, said the shutdown could have “disastrous impacts” for consumers. “You can bet the do-badders are licking their chops,” his statement read. More on Bloomberg BusinessWeek [...]

DALLAS — With the Dallas Mavericks’ season-opening game still a month away, the basketball team’s outspoken owner, Mark Cuban, will be seeing a different kind of court this week. The government’s insider-trading case against Cuban goes to trial Monday in federal court in Dallas. Cuban is expected to testify, and experts say the verdict could come down to whether jurors find the billionaire and regular on the ABC reality show “Shark Tank” to be likable or smug. Cuban is accused of using insider information to dump his stock in a small Internet-search company in 2004 just before the shares fell in value. He avoided $750,000 in losses. The Securities and Exchange Commission wants Cuban to give up the money and pay a civil penalty. More in the Huffington Post [...]

Even by the lamentable standards of U.S. banking and securities regulators, the settlements unveiled this week with Toronto-Dominion Bank (TD) for its role in a $1.2 billion Florida Ponzi scheme were incredibly lacking. Three federal agencies on Sept. 23 said they had struck deals with TD Bank, the Toronto-based lender’s U.S. unit. The penalties amounted to $52.5 million: $37.5 million to settle allegations by the Office of the Comptroller of the Currency and $15 million to the Securities and Exchange Commission. Per the usual niceties, TD Bank neither admitted nor denied the agencies’ claims, which ranged from negligence to violations of anti-money-laundering laws. It also settled with the Financial Crimes Enforcement Network, a unit of the Treasury Department, but that won’t result in additional payments. More on Bloomberg here.
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Bank of America Corp’s Countrywide unit placed profits over quality in a “massive fraud” selling shoddy mortgages to Fannie Mae and Freddie Mac, a U.S. government lawyer said on Tuesday. The claim came at the start of the first case by the government to go to trial against a major bank over defective mortgage practices leading up to the 2008 financial crisis. Pierre Armand, a lawyer in the civil division of the U.S. Attorney’s Office in Manhattan, said Countrywide made $165 million selling loans that it promised were investment quality to Fannie and Freddie. More on Reuters [...]

JPMorgan Chase has agreed to pay about $800 million to a host of government agencies in Washington and London — and make a groundbreaking admission of wrongdoing — to settle allegations stemming from a multibillion-dollar trading loss, people briefed on the matter said. The settlements, expected this week, will help the nation’s biggest bank move beyond last year’s $6 billion blunder and mend frayed relationships with regulators. Senior JPMorgan executives also avoided charges in the case, another victory for the bank, despite initial questions about whether they misled investors about the risk of the trades. Even so, it seems unlikely that the bank will be able to close the chapter on the case known as the London Whale just yet. More in the New York Times [...]